401k Calculator
Projects your 401(k) balance at retirement by combining your current savings, ongoing contributions, employer match, and expected investment growth. Use it to see whether you are on track and how much employer matching adds to your nest egg.
About this calculator
This calculator uses the future value of a lump sum plus the future value of an annuity to project your retirement balance. The formula is: Balance = currentBalance × (1 + r)^n + (employeeContribution + employerContribution) × [((1 + r)^n − 1) / r], where r = annual return rate / 100 and n = years to retirement. Your annual employee contribution equals annualSalary × (contributionPercent / 100). The employer contribution equals the lesser of (employeeContribution × employerMatch / 100) and (annualSalary × matchLimit / 100) — meaning the match is capped at the match limit. The annuity portion assumes contributions are made at the end of each year and compounds at the stated return rate. This is a simplified annual model; actual 401(k) growth compounds more frequently and contributions are made per paycheck.
How to use
Assume: current balance $20,000; salary $70,000; employee contribution 6%; employer match 50% of contribution; match limit 3% of salary; annual return 7%; 25 years to retirement. Annual employee contribution = $70,000 × 6% = $4,200. Employer match = min($4,200 × 50%, $70,000 × 3%) = min($2,100, $2,100) = $2,100. Total annual contribution = $6,300. Lump-sum growth: $20,000 × (1.07)^25 = $108,618. Annuity growth: $6,300 × ((1.07^25 − 1) / 0.07) = $6,300 × 63.249 = $398,469. Projected balance ≈ $507,087.
Frequently asked questions
How does employer 401k matching work and how much free money am I leaving on the table?
Employer matching means your company contributes additional funds to your 401(k) based on your own contributions, up to a specified limit. A common arrangement is a 50% match on contributions up to 6% of salary — so if you earn $80,000 and contribute 6% ($4,800), your employer adds $2,400. If you contribute less than the match threshold, you forfeit part of that benefit. Over a 30-year career, unclaimed employer match dollars can cost tens of thousands in lost compounding growth, making it one of the highest-return financial decisions available to employees.
What annual return rate should I use when projecting 401k growth?
A commonly used long-term assumption for a diversified stock and bond portfolio is 6–7% per year after fees, reflecting historical average US stock market returns minus typical fund expense ratios. More conservative portfolios (heavier bond allocation) might use 4–5%, while aggressive all-equity portfolios sometimes project 8%. The actual return you earn will differ year to year; the calculator provides a smooth-average projection. Always run scenarios with a lower return (e.g., 5%) to stress-test whether you still meet your retirement goal.
When should I increase my 401k contribution percentage and by how much?
Financial planners generally recommend contributing at least enough to capture the full employer match — this is the minimum baseline. Beyond that, aim to save 15% of gross income for retirement (including employer contributions). Good trigger points to increase your contribution include receiving a raise, paying off high-interest debt, or when annual contribution limits are raised by the IRS. Even a 1–2 percentage point increase early in your career can add hundreds of thousands of dollars to your balance by retirement due to compounding.